If you've ever opened your monthly processing statement, scrolled through pages of codes and abbreviations, and closed it again, you're not alone. Statements can be hard to read, and that's a big reason many owners don't know what they're really paying to accept cards.
You don't need to understand every line. You need a few key numbers and the right questions. Here's how to find them.
Step 1: Find your total card sales
Near the top, usually in a summary box, you'll see your total card volume for the month. It may be labeled "Total Volume," "Gross Sales," or "Amount Submitted." Write it down.
Step 2: Find your total fees
Next, find the total you paid in fees that month. It might say "Total Fees," "Fees Charged," or "Discount Due." Some providers take fees daily and others take them at month-end, so this number can turn up in an unexpected spot. Write it down too.
Step 3: Calculate your effective rate
This is the most useful number you'll get from your statement:
Total fees ÷ total card sales × 100 = effective rate (%)
For example, $700 in fees on $20,000 in sales works out to 3.5%. (This is an illustration, not a typical or average rate.)
Your effective rate is your real, all-in cost of accepting cards. It's often different from the rate you were quoted, because a quoted rate may only apply to some transactions, or may leave out monthly and per-item fees.
Step 4: Know where the fees come from
Most processing fees fall into three buckets:
- Interchange. These fees are set by the card networks and paid to the bank that issued your customer's card. They vary by card type and by how the card is taken. A rewards credit card usually costs more than a basic debit card, and a card number typed in by hand often costs more than a card that's tapped or dipped.
- Assessments. These are smaller fees charged by the card brands themselves.
- Processor markup. This is what your provider charges on top. It varies the most from one provider to another, and it's usually where there's room to compare.
Step 5: Figure out your pricing model
- Tiered. If you see words like "qualified," "mid-qualified," or "non-qualified," you're probably on tiered pricing. Your transactions get sorted into buckets with different rates, which makes costs hard to predict.
- Interchange-plus. You pay the actual network cost plus one disclosed markup. The statements are longer but easier to check.
- Flat rate. One percentage (sometimes plus a per-transaction fee) on everything. It's simple, but not always the lowest-cost option as your volume grows.
- Cash discount or surcharge. Card fees are covered at checkout instead of coming out of your margin. These programs must follow card network rules and state law, and surcharging isn't allowed everywhere.
Step 6: Scan for extra fees
Look for monthly statement or service fees, PCI compliance or "non-compliance" fees, batch fees, annual fees, minimum monthly fees, and equipment lease charges. Many are legitimate. The goal is to know what each one is for. If a fee showed up recently and you don't remember agreeing to it, ask.
What this looks like in your business
- Restaurants: Check how tips and card-not-present orders (online and phone) are priced. Keyed-in and online transactions often cost more than tapped or dipped ones.
- Auto body shops: Large tickets mean even a small difference in rate can add up to real dollars. Also check whether invoices paid by phone are being keyed in.
- Retail: Lots of small transactions means per-transaction fees matter. A 10-cent fee on every sale shows up quickly on a busy day.
Step 7: Check your contract
Your statement won't tell you everything. Look at your merchant agreement for the contract length, any early termination fee, and whether your rates can change and how much notice you'll get. Equipment leases in particular can run for years and may be hard to cancel.
Questions to ask your current provider
- What's my effective rate over the last three months?
- Which pricing model am I on?
- What is each monthly and annual fee for?
- Have any rates or fees changed in the past year?
- Is there an early termination fee?
Curious what you pay now? Our savings calculator shows what card fees may be costing you, based on numbers you enter. It's free and takes a few minutes.
Open the savings calculator →Want a second set of eyes?
At Keepwell, we offer a free, no-obligation statement review. Send us a recent statement and we'll walk you through what you're paying and why, in plain English. A review can show whether another setup may cost you less. If your current setup is already a good deal, we'll tell you that too.
Want us to look at your statement? Upload it at keepwellpayments.com/upload for a free, no-obligation review.
Call (347) 219-0212 (Mon–Fri, 9am–6pm ET) or email hello@keepwellpayments.com.
Keepwell Payments, LLC is an independent payments agency, not a bank or payment processor. Each merchant account is set up with a payment processor we partner with and its sponsor bank, named in writing before you sign. Merchant accounts are subject to approval. Results vary by business. Programs must follow card network rules and applicable state law, and your pricing and every fee are confirmed in writing before you sign. This article is general information, not financial or legal advice.